TMI Blog2019 (9) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... ates to GST, taxes and levies, is dependent upon the rate applicable. There was no discretion in the bidders or the employer to consider and include GST at a rate other than that which is applicable. Submission of total price summary including GST at a rate other than that which is applicable, therefore was a discrepancy. Likewise, petitioner did not have the option of submitting total price summary containing mounting structure with junction boxes lesser in number than what was required. Submission of such total price summary by the petitioners, therefore also constituted a discrepancy. Authorities were therefore correct in allowing rectification of such discrepancies in total price summary submitted by respondent No. 4 as well as the petitioners, after observing the procedure available in clause 2.21 of the RFP. In fact, if such discrepancies in total price summary were not corrected, the same would have resulted in an incorrect evaluation of total price summary submitted by both parties. This would have been to the detriment of the entire project and public interest. In the instant case, parties, i.e. the petitioner, respondent No. 4 as well as the employer, in the process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts are as follows: One International Competitive Bidding Notice Inviting Tenders bearing NIT No. 08/MD/PSL/2018 dated 22.06.2018 was published electronically on the e-procurement portal of the government of Bihar and also in print in national newspapers on 24.06.2018 with the seal and signature of Managing Director, Patna Smart City Limited, Patna (hereinafter referred to as PSCL for short. Five Bidders submitted their tenders who are: A. Larsen Toubro Limited (Petitioner) Consortium Partner M/s Fluent Grid Ltd. B. Tara Projects Limited (Respondent no. 4) Consortium Partner M/s Wipro C. Shapoorji Pallonji Consortium Partner M/s. Schneider Electric + CMS Ltd. D. Bharat Electronic Ltd. (BEL) Consortium Partner M/s Horizon Technologies + Sofrtech Engineers Ltd. E. Bharat Sanchar Nigam Ltd. (BSNL) Consortium Partner M/s Hitachi + Rolta + Vantage. The Bid of all the five tenderers were evaluated by PSCL appointed ICT expert of Project Management Consultant and also the tender committee based on the pre-qualification and technical qualification criteria as mentioned in the Request for Proposal ( RFP for short). Minimum 70 marks were r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the Central Vigilance Commission Guidelines (hereinafter guidelines for brevity) dated 18.11.1998 could not have entered into post tender negotiation and allowed respondent No. 4 to alter its total price summary. In support of this contention Mr. Sandeep Kumar appearing for the petitioner refers to Clause 14.1 of the guidelines (Annexure 7A). Other than the CVC guidelines Mr. Sandeep Kumar, petitioner s Counsel, also refers to Clause 2.21 of the RFP. It is his submission that in case of discrepancy in commercial bid the discretion of the authorities were limited under Clause 2.21 of RFP. The nature of discrepancy and to what extent and how the discrepancies could be permitted to be removed have been exhaustively laid down in sub-clause a), b) and c) of Clause 2.21 of the RFP and beyond the three circumstances laid down under Clause 2.21, authorities had no discretion to allow bidders to correct/remove any other aspect of the Total Price Summary. Authorities, therefore could not have permitted respondent no. 4 to change its Total Price Summary in the garb of exercising discretion under Clause 2.21 of the RFP. Since the price bid submitted by respondent No. 4 was quoting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel has submitted that reading the provisions of Clause 8, 8.1 and 2.21 a), b) and c) of the RFP, the respondent authorities had no discretion to enter into negotiations with respondent No. 4 who had submitted bid higher than the petitioner. He has also laid emphasis on the bar for entering into negotiation with bidders other than L-1, imposed in the CVC guidelines. As per Clause 8 and 8.1 of the RFP bidders were to submit their price bid including GST. Such requirement as per RFP could not be permitted to be relaxed by the respondent authorities in favour of respondent No. 4, on their own perception regarding Clause 2.21 a), b) and c) as the same did not contemplate such discretion in the respondent authorities to allow alteration/modification of the price bid, to the prejudice of the highest bidder (L-1) i.e. the petitioner. Petitioner is the most suitable entity to execute the contract as it has executed 22 smart city projects through out the country. Terms and conditions in the RFP are fixed. Authorities, therefore, cannot be permitted to alter the same by their own perception of the same, and allow respondent no. 4 to change the Total Price Summary, earlier submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd, and GST as applicable only could have been included in the Total Price Summary. The effect of the exercise undertaken under Clause 2.21 of the RFP is that discrepancy in Total Price Summary of respondent No. 4 has been removed. As a result public purpose and interest has been served and the lowest bidder by considering the total price summary including GST @ 12% (as applicable) has emerged successful. Reading Clause 2.21 as a whole he submits that Clause 2.21 (b) clearly contemplates as follows:- If there is any discrepancy in commercial bid, it will be dealt as per the following:- The discretion of the authorities to deal with the discrepancies was not limited to illustration in Clause 2.21 a), b) and c). It is further understood from the reading of sub clause d) of Clause 2.21. Sub-clause d) of Clause 2.21 of RFP reads as follows:- 2.21 . d) If there is such discrepancy in an offer, the same shall be conveyed to the bidder with target date up to which the bidder has to send his explanations. On the above lines PSCL reserves the right to take appropriate decision which needs to be agreed by the bidder. If the bidder does not agree to the decision of PSCL, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that ultimate intention of the request for proposal or core spirit was to evaluate the bids on basic price. Quoting of taxes, levies and duties submitted by the bidders could by no stretch of imagination be considered as relevant component in the bidding process. The authorities have rightly considered the price bid of respondent No. 4 including GST as applicable i.e. (@ 12%). As applicable has consciously been mentioned in Clause 8.81. It indicates that none of the bidders or employer has the discretion to consider total price summary including GST at any rate. It could only be at the applicable rates. Senior Counsel Mr. Lalit Kishore, appearing for the respondent PSCL, in support of his submissions has placed reliance upon the decision of the Apex Court in the case of Municipal Corporation, Ujjain anr. Vs. BVG India Limited ors. Reported in (2018) 5 SCC 462 . He has placed specific reliance on para 11 to 16, 21, 26 and 27. He has submitted that purpose of judicial review is to ensure that parties are meted out fair treatment in furtherance of public interest and public purpose. Unless the Court is satisfied that there is a substantial public interest involved or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate when petitioner as well as respondent No. 4 both were allowed opportunity to correct discrepancies in their bids, petitioner had never been declared as L-1. Since the petitioner had never been declared L-1 basic premise for invoking the provisions of the CVC guidelines are lacking. He submits that even if the petitioner, for the sake of argument, without admitting to the same, had ever been declared as L-1 (lowest bidder) CVC guidelines could not have been made applicable in this process as it is clear from bare perusal of CVC guidelines that the same applies only to the central government, its offices, boards and corporations. Respondent Nos. 1 to 3 are not covered by the CVC guidelines. The guidelines were issued in furtherance of CVC Ordinance 1998, which clothed the CVC with powers and functions to exercise superintendence over vigilance administration of the various Ministries of the Central Government or Corporations established by or under any Central Act, government companies, societies and local authorities owned or controlled by central government. In this connection he refers to the opening lines of the guidelines (Annexure 7 series) of I.A. No. 1 of 2019. the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent No. 4. Counsel appearing for respondent No. 4, in support of his submissions has placed reliance upon decision of the Apex Court in the case of Jagdish Mandal vs. State of Orissa ors. Reported in (2007) 14 SCC 517 . He has also led great emphasis on the fact that discretion exercised by PSCL for removal of discrepancy was in furtherance of the intention to select the total price summary including GST as applicable . The admitted position is that 12% GST was applicable. The clear and specific intention of Clause 8 of RFP was to ensure that GST was included in the total price summary submitted by tenderers at no other rate than what is applicable. If respondent No. 4 upon being offered an opportunity to remove discrepancy had not agreed to include GST at the rate applicable, the consequence may have been otherwise. Since respondent No. 4 had agreed, the intention of Clause 8 of the RFP was fulfilled. Entire exercise undertaken by the respondent authorities in selection of the lowest bidder by adopting a procedure which was described in Clause 2.21 of the RFP. Final decision of the respondent authorities therefore has only resulted in furtherance of public inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner as well as respondent No. 4. He thus submits that in view of judgment of the Apex Court relied upon this Court should not interfere with the discretion exercised by the authorities in favour of respondent No. 4. Having considered the rival submission of the parties this Court is in agreement with the submissions advanced on behalf of the respondents. Ongoing through the terms of the RFP, it is clear that parties submitting the price bid had no option or discretion in respect of the rate at which they could quote GST. None of the bidders could gain any advantage by quoting the rate of GST as per their discretion. The total price summary quoted by the parties, as per the scheme of the RFP was to form the basis of evaluation inter se the parties. As far as the component of GST is concerned, the same was required to be included as applicable . Admittedly, GST at the rate of 12% was applicable for the works in question at the time of evaluation of price bid. The requirement of GST as applicable clearly meant rate applicable. The scheme of the RFP is such that the price summary, insofar as it relates to GST, taxes and levies, is dependent upon the rate applicable. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officious Bystander Test [Shirlaw v. Southern Foundries (1926) Ltd. [Shirlaw v. Southern Foundries (1926) Ltd., (1939) 2 KB 206 : (1939) 2 All ER 113 (CA)] ]. This test has been set out in B.P. Refinery (Westernport) Proprietary Ltd. v. Shire of Hastings [B.P. Refinery (Westernport) Proprietary Ltd. v. Shire of Hastings, 1977 UKPC 13 : (1977) 180 CLR 266 (Aus)] requiring the requisite conditions to be satisfied: (1) reasonable and equitable; (2) necessary to give business efficacy to the contract; (3) it goes without saying i.e. the Officious Bystander Test; (4) capable of clear expression; and (5) must not contradict any express term of the contract. The same pentaprinciples find reference also in Investors Compensation Scheme Ltd. v. West Bromwich Building Society [Investors Compensation Scheme Ltd. v. West Bromwich Building Society, (1998) 1 WLR 896 : (1998) 1 All ER 98 (HL)] and Attorney General of Belize v. Belize Telecom Ltd. [Attorney General of Belize v. Belize Telecom Ltd., (2009) 1 WLR 1988 (PC)] Needless to say that the application of these principles would not be to substitute this Court's own view of the presumed understanding of commercial terms by the parties i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers as well as the respondent No. 4. This Court would also take into consideration the consequence of such correction. The effect of such correction was that the lowest bidder came to be selected. The rates submitted by the respondent No. 4 which has been accepted is much above the project cost/DPR of 254 crore, on the basis of which proposals were invited by the PSCL. Acceptance of the proposal submitted by respondent No. 4 was thus in furtherance of public interest. Various judgments cited at the Bar, which are relevant to the facts and circumstances of the instant case, leave no room for doubt that discretion exercised by the respondent authorities was as per their bonafide understanding and in furtherance of the objectives intended in Clause 8 of RFP. The discretion to allow removal of discrepancy was as per the procedure prescribed in clause 2.21 of the RFP. This procedure was invoked to allow removal of discrepancy uniformly and without any discrimination in favour of both petitioner as well as respondent No. 4. Result of the exercise/discretion of the authorities is that lowest bidder has come to be selected and as such neither interest nor public purpose has suffered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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